Illinois Bill Would More Than Double Gas and Diesel Taxes

SPRINGFIELD, Ill. — Illinois’ gas tax would more than double, giving the state the highest total fuel taxes in the country, under a proposal to raise money for transportation infrastructure.

State Sens. Martin Sandoval and Don DeWitte have introduced House Bill 391, which would increase the state gas tax from 19 cents per gallon (CPG), where it has sat unchanged since 1990, to 44 CPG, the Chicago Tribune reported. It would also raise the diesel tax from 21.5 CPG to 52 CPG. The increase would go into effect this July. Illinois also levies a 6.25% sales tax on fuel purchases.

Some parts of the state levy additional taxes on fuel purchases: Cook County, the most populous county in the state, has a 1.75% sales tax and 6-CPG motor fuel tax. Chicago has a 1.25% sales tax and a 5-CPG fuel tax.

The bill would also double the driver’s license fee from $30 to $60, and the vehicle registration fee from $98 to $148. Electric-vehicle (EV) owners, meanwhile, would see the state registration fee jump from only $17.50 to $1,000 per year, giving Illinois by far the highest EV fee in the nation.

On May 9, HB 391 advanced through the Illinois General Assembly after the House Revenue & Finance Committee voted to approve it by a 9 to 6 vote, Illinois Policy reported.

This latest legislation joins other proposals to raise Illinois’ gas tax, including one from former Chicago Mayor Rahm Emanuel to raise it by 20 to 30 CPG. This immediately drew pushback from fuel retailers along the state’s border, who argued it would hurt area businesses and consumers.

Fuel marketer groups in Illinois are fighting HB 391. Bill Fleischli, president of the Illinois Petroleum Marketers Association and Illinois Association of Convenience Stores (IPMA-IACS), argued that federal and state gas tax revenues already generate $4 billion each year. “Look at the money that’s been raised and being raised, and appropriate it to where it’s supposed to go and that's to roads for Illinois,” Fleischli told Illinois News Network. The IPMA-IACS have launched a website, tankthetax.org, to fight the bill, which would give Illinois the highest total fuel taxes in the country.

Fleischli said increasing fuel taxes would slam border communities, especially if Illinois also increases its cigarette tax, as is under consideration, and as it is increasing its minimum wage. In February, Gov. J.B. Pritzker signed a bill that would increase the state minimum wage to $15 per hour by 2025.

“That’s impossible for small businesses to take care of,” said Fleischli. “The minimum-wage increase is going to be more than some convenience stores make—it’s almost impossible. You’ll see a lot of facilities close to the border closing.”

The Illinois Chamber of Commerce supports a separate bill to raise the gas tax. HB 3823 would increase the gas tax by 15 CPG and phase out the state sales tax on fuel purchases.